Toxic Philanthropy Part Three: The Silicon Valley Community Foundation

I spent quite a few hours over winter break exploring various aspects of the Silicon Valley Community Foundation’s (SVCF) operations and have prepared a series of posts documenting what I have found thus far. This series is intended to provide context for my previous research on Pay for Success pilot programs being rolled out in Santa Clara County, CA, the heart of Silicon Valley (more here). SVCF has played a role in many of these efforts and is a prominent institution in philanthropy whose influence is felt not just in that region, but globally.

It is an overwhelming amount of material, and I struggled with how best to organize it. I have five posts prepared now and expect it may end up double that.  This is the third chunk of research I have done on what I am calling the “toxic philanthropy” of Silicon Valley. My first post was on Salesforce and Amazon (here) followed by another on the William and Flora Hewlett Foundation’s efforts to re-engineer philanthropy as a data-driven, tech-mediated enterprise (here).

Before I jump into the thick of it, I wanted to present an overview of ten things to keep in mind as you make your way through this series:

Pay for success impact investing is in the midst of a period of experimentation as venture capital interests attempt to identify the most efficient financial structure they can use to scale this new market sector.

Pay for success runs on massive amounts of personal data. That is the “impact” tracked in outcomes-based contracts. Attempts will be made to convince people that their data is “private.” Even so, it will be used to profile them and make predictions about future behaviors that inform if and how they are able to access services, including education.

The Bay Area is the logical place for such a system to be refined, because it sits at the juncture of venture capital and emerging technologies. It is the entrepreneurs of Silicon Valley who are developing the digital systems that will track people and monitor payments related to social service access and finance. Reducing social care to data that must be tracked on a dashboard is fundamentally dehumanizing for all involved-those receiving services and those providing them.

SVCF is far and away the largest community foundation in the United States and is one of the largest foundations in the country. Its assets have grown enormously in recent years as tech billionaires have funneled donations of appreciated stock and crypto-currency into donor-advised funds. A substantial percentage of its assets are in Facebook stock.

Since its creation in 2007, SVCF has directed hundreds of millions of dollars to organizations that seek to privatize public education, including charter schools and educational technology ventures.

Its influence lies not only in the grants it awards, but how it invests the $13.5 billion in assets it manages. Increasingly, these assets are being directed into social impact investing.

Globally, community foundations are being integrated into the social impact investment program. They leverage knowledge of local operating environments to advance unproven financial strategies that would be deemed too risky if proposed by organizations with less established reputations. They are the deal makers. That is the role SVCF has played with Pay for Success in Santa Clara County.

Community foundations enjoy special benefits under IRS law. They are not required to disburse funds annually, which means they can hold onto assets until favorable conditions arise. They are also able to obscure the specific source of donations, since grants from DAF funds list the sponsoring organization as the donor, not the owner of the fund itself.

SVCF is an example of a foundation that is sending a significant portion of its grant awards outside the region and even outside the United States. It may be doing this to secure investment opportunities that yield “impact” more readily than projects closer to home.

This form of philanthropy is neither humane, nor charitable. It deploys patient capital to prop up markets for predatory ventures that are intended to derive profit from the poor. Historically oppressed communities of black, brown and indigenous people will experience significant harm as they are subjected to digital surveillance and dispossession imposed under the banner of “charity.” Many of these “charitable” ventures in Silicon Valley have ties to the Catholic Church and even the Vatican. In this 400th year since enslaved Africans were brutally taken from their homelands by settler colonists and sold into bondage in Jamestown, it merits considering if we are seeing the  “Doctrine of Discovery” play out once again as we cross into a new age of digital empire.

Part One: Silicon Valley’s Social Impact Deal Maker

Part Two: To Serve Man: It’s A Cook Book!

Part Three: Philanthropy’s Lesser Known Weapons: PRIs, MRIs and DAFs

Part Four: Charter, Public Health and Catholic Charity Interests Help Launch “Disruptive” Pay for Success Program

Part Five: When Community Foundations Go Global (Or Coastal)

 

Silicon Valley: A Laboratory of “Smart” Surveillance and Privatization

The scope of my research has expanded greatly since I began this journey five years ago. My starting point was standardized testing. At the time I was under the naive impression that withholding student test scores could in and of itself  forestall the closure or “turnaround” of neighborhood schools in Philadelphia. During the spring and summer of 2015, I realized “end of year testing” was merely a warm up for “all-the-time” online testing ushered in by ESSA. Valuable relationships came out of that movement; still, it was a blow. It took me half a year to regroup. I continued digging and slowly came to understand the vast reach of technology-enabled predatory social impact investing, grounded in Dr. Tim Scott’s foundational research, here, here and here.

The machine bearing down on us will use online interventions to manipulate student data in ways that redirect public funds into private hands under the guise of “evidence-based” “impact.” These systems are being deployed not only in charters, where they are field tested, but in neighborhood schools where blended “personalized learning” has taken hold. The incubation of Zuckerberg’s Summit Basecamp within Summit charter schools is but one example. Privatizers no longer need to close schools and replace them with charters to turn a profit. It is efficient, and often less rancorous, to negotiate agreements with outside management organizations that ostensibly keep schools “public” while setting children up for expanded data extraction. Once agreements are signed, administrators have free reign to impose data-driven initiatives that claim to “close gaps.” Flush districts (are there any left?) or those caught in the web of deep-pocketed donors may open “innovation” model schools to carry out this agenda. Technology-based instruction, whether implemented via laptops, tablets or Internet of Things tracking, sustains global markets in hardware, software, broadband and cloud computing, as well as “impact” investment markets linked to educational outcomes – DATA. The speculative nature of this enterprise centers “risk” analysis and profiling of students. It is incredibly dangerous.

By following the money, lots of it, I came to see how this system of converting human life to data for profit would not be limited to education, but extended into other social services: health care, counseling, workforce development, supportive housing, addiction treatment, prison re-entry. The goal is exhaustive data profiles collected on all children from pre-k through college, even extending to long range employment and health outcomes if they are able to successfully legislate it. Through continued austerity and reliance on outsourced services, including highly-anticipated “wrap around services,” education is systematically being woven into the nonprofit industrial complex, or as Sir Ronald Cohen father of British venture capital calls it, “The Social Sector.” Wherever the tech / telecommunication / impact investment sectors can take human services and put them online to leverage data-mining for profit, they will. Faux “tele-services” and apps are being pushed onto families and into schools using deceptive “community school” branding. These interventions, meta-data tagged bait and switches callously proffered in response to deep trauma and life and death need, will be weaponized against children and families, pushing the lives of the most vulnerable onto data dashboards for review by financiers.

Gambling on the life outcomes of those accessing public education and other services is a challenging endeavor requiring deft coordination of many moving parts. Those setting up these predatory public-private investment schemes must:

  • establish easily measurable sectors for for “impact” interventions
  • set agreed-upon terms of success
  • develop technology that can cheaply and efficiently capture impact data
  • fund research to establish credibility
  • convince elected officials that outcomes-based contracts are a bipartisan “win”
  • align government procurement systems to the new model
  • maximize data interoperability across sectors
  • coordinate public private partnerships with venture capitalists
  • compel administrators (and their staff) and clients (including students) to comply

Despite the billions of dollars pouring into these ventures, financiers haven’t yet figured out how to bring it to scale, which is good news. There is still time to derail it, but we must get people to understand the danger to organize effectively. A lot of the most nefarious aspects of this plan are cloaked in progressive language, which makes it difficult to deconstruct, especially in such hyper-partisan times as we now face.

Global monopoly capital believed Social Impact Bond finance would be their tool to launch a new era of biocapitalism. Happily, SIBs have proven too cumbersome, which bought time. SIBs have now largely been supplanted by generic pay for success initiatives, which offer more flexibility in how deals can be structured. This past summer the branding was further tweaked as both sides of the aisle celebrated the Social Impact Partnership Pay for Results Act (SIPPRA). That language hit a lot of targets: social impact, partnerships, and results. Win, win, win! If you were to buy their fraudulent sales pitch, such P3 arrangements will bring “equity while minimizing public expense; it is already embedded in “what works” “moneyball for government” programs nationwide. So how to upend this evil construct, steeped in surveillance? Venture philanthropists always seem to be twenty steps ahead, establishing the narrative and determining the talking points. I’m committed to using this blog to disrupt as much as possible and hope you’ll digest the material and share it with others. At the end of a trying year, I’ll admit to being tired and discouraged. 

Fin-tech continues to tinker with the formula. The stakes are high as the bottom of the economic pyramid balloons. The oligarchs must figure out a way to extract profit from people with little money, and quickly. For capital to circulate on terms that further concentrate wealth in the hands of global investors, full-scale privatization of the social sector, including education, must advance rapidly.  And what better place to refine the mechanics than the Bay Area? As a playground for tech bros who who love nothing more than to move fast and break things where there is ready access to the Stanford Business School network and billions in untapped assets at the Silicon Valley Community Foundation, it should come as no surprise that the environs of San Francisco have seen a lot of technology-enabled, social impact, financial tinkering over the past five years.

In fact, a new social impact product was trialled this year at San Quentin prison. It is called an “impact security,” and the idea is that venture philanthropy will agree to pay back private investors when outcomes-based contracts hit their data targets. What is significant is that this iteration of “profiling for profit” doesn’t require ANY government participation. A non-profit can issue debt to provide a social service (market created courtesy of austerity budgeting), and that debt can be purchased directly by investors. It’s a P3 initiative where there is NO public oversight. The government is left out of the equation altogether. The concept was developed by NPX, and the test case called “The Last Mile” is funded by Omidyar Network, a major player in global impact investing. The terms of “success” involve hitting a set number of hours of prison labor logged by incarcerated people. In this case the labor is computer coding, which begs the question are we expected look the other way when state-sanctioned oppression involves STEM training?

The relationship map below depicts projects underway in the Silicon Valley.

Santa Clara San Jose Impact Investing

Interactive version here.

Four of these are social impact initiatives: straight up impact investments (The Big Lift and Strong Start), a social impact bond (Welcome Home), and a pay for success program (Partners in Wellness). There is a test case for the collection of impact data around executive function, a known area of interest for impact investors. And a prototype interoperable data warehouse (Datazone), as well as a youth badging pilot program being deployed in San Jose. San Jose is of particular interest, because there are many parallels to Philadelphia. San Jose and Philadelphia are both Smart Cities seeing a lot of “what works” initiatives, “innovative” partnerships linking city government, technology interests and venture philanthropy. If you’re curious, see the links below:

Similarities between San Jose and Philadelphia.

Smart Cities: Philadelphia / San Jose

Comcast machineQ IoT Pilots: Philadelphia / San Jose

Knight Foundation IoT Grants: Philadelphia / San Jose

FUSE Corps Fellow Programs: Philadelphia / San Jose

Living Cities Members: Philadelphia / San Jose

Cities of LRNG (learning ecosystems): Philadelphia / San Jose

Digital Badge Pilots: Philadelphia / San Jose

Ideas42 Research Sites: Philadelphia / San Jose

Pre-K Initiatives: Philadelphia / San Jose

Charter School Lobbyists: Philadelphia / San Jose

Third Sector Capital Partners has had a role in all four Silicon Valley impact investing initiatives. George Overholser, formerly of Capital One and the NonProfit Finance Fund, founded the organization with Caroline Whistler, who had also worked for the NonProfit Finance Fund and before that at Ashoka. Third Sector has offices in Boston, San Francisco and Washington, DC. They were among those tapped to accelerate the growth of the nascent pay for success market in October 2014. That year Congress significantly increased the budget of the Social Innovation Fund, a program of the Corporation for National and Community Service. Third Sector received $1.9 million to provide technical assistance to spur development in the field. In the case study prepared for the ROCA SIB, George Overholser stated the mission of Third Sector Capital Partners is to “accelerate America’s transition to a performance-driven social sector.”

Timeline with milestone PFS projects for reference:

2012: New York City Riker’s Island SIB (incarcerated youth)

2012: Santa Clara, CA, Strong Start Pre-K Launched (impact investment)

2013: Salt Lake City, UT, Pre-K SIB

2013: San Mateo, CA, Big Lift (Early Literacy), (impact investment)

2013: Silicon Valley Regional Data Trust Grant (NSF)

2014: Commonwealth of MA, ROCA SIB (“at risk” youth)

2014: Chicago, IL, Pre-K/Early Literacy SIB

2014: Datazone Under Development (SCCOE Update)

2015: SVRDT Partners with Datazone, MOU

2015: Santa Clara County, CA, “Welcome Home” SIB

2015: San Jose Smart City Pilot, Press Release

2016: South Carolina, Nurse Family Partnership Home Visit PFS (Pay for Success)

2016: San Jose City of LRNG Launched

2016: Neuroscape Research Initiated in Select San Jose Schools, Gazzaley Lab Overview

2016: Santa Clara County, CA “Partners in Wellness” PFS (mental health)

2017: San Jose, Youth Badging Pilot, Video

Below are brief descriptions and relationship maps for these projects. I intend to go into greater detail on aspects of some of the maps later in the series.

Strong Start

Organized efforts promoting early childhood education began in 2010 with the creation of an early learning master plan targeting children ages 0 to 8 and their families in Santa Clara County, CA. A large coalition of corporate, philanthropic, governmental and nonprofit interests was brought together to advocate for expanded pre-k after Race to the Top funding was obtained by First Five Santa Clara in 2012. In 2016, the county received a US Department of Education pay for success grant to hire Third Sector to consult on the use of outcomes-based contracting as a means of increasing access. Sunnyvale School District was the test case. The process identified screening and assessment tools to advance this financial model. Datazone, which is under the purview of Marcy Lauck, Director of Data Governance for the Santa Clara County Office of Education, was part of this grant. SRI International and the Urban Institute advised on the project. The following year the Strong Start Coalition finalized an updated early childhood education plan with input from these working groups: Access; Articulation, Alignment and Data Systems; Facilities; Family Engagement; Planning; Program Quality; and Workforce Development.

Interactive map here.

Strong Start Santa Clara

The Big Lift

The goal of this program, backed by a coalition of over 200 partners, is to implement the Annie E. Casey Third Grade Reading Campaign framework to improve kindergarten “readiness” and third grade reading and math proficiency among low income students in San Mateo County, CA. Big Lift got its start in 2013 and moved to proof of concept stage in 2015. The plan is to expand the the program to 8,600 children by 2020 at an estimated annual cost of $30-40 million. It builds upon a county-wide “preschool for all” program piloted between 2005 and 2009. Major funding came from the CA preschool block grant program, the Silicon Valley Community Foundation, San Mateo County, and First Five San Mateo. Third Sector did not play a major role in this initiative, though they are listed as a partner.

Interactive list of funders here.

Interactive list of select program partners here.

Big Lift Funders

Big Lift Partners

Silicon Valley Regional Data Trust: Datazone

To maximize social impact profit, it is crucial that data across social sectors be compiled in one place. Ultimately, deal evaluators want to know everything about how a given intervention “impacted” a person’s life. Aggregating information that might otherwise be siloed compounds financial gains for investors. For that reason Datazone is the most significant project in this post. The origins of Datazone, and its companion effort the Silicon Valley Regional Data Trust (SVRDT), date back to 2001 when Marcy Lauck, current Director of Data Governance for the Santa Clara County Office of Education, was working as a consultant with Education for the Future, a research institute based at UC Chico. Her major accomplishment was to create a K12 data warehouse for the San Jose Unified School District. Lauck went on to join the National Laboratory for Education Transformation (NLET) where she and colleagues, many affiliated with UC Santa Cruz, secured an NSF grant in 2013 to develop a multi-county database linking health and human service data (child welfare, juvenile probation, and behavioral health) to education data. That effort evolved into the Silicon Valley Regional Data Trust.

Parallel with that work, the Santa Clara County Office of Education (SCCOE) launched a data initiative with Hoonuit. In 2015, the county signed a memorandum of understanding linking SVRDT with Datazone. The following year Lauck left NLET and joined SCCOE to become Director of Data Governance, overseeing Datazone, and point person for data on the Strong Start initiative. In 2017 with major support from the Chan Zuckerberg Initiative, SVRDT was officially launched. The program was a founding partner of the National Interoperability Collaborative (NIC), and Lauck has since made appearances around the country promoting Datazone/SVRDT as a national model for data interoperability with support from NIC’s initiators Stewards of Change and AcademyHealth. According to a feature article about the effort on the Hoonuit website, the warehouse holds data on 250,000+ students in 30 districts with over 90 dashboards and 350 “actionable” metrics.

Interactive map here.

Datazone

Welcome Home

The number of unhoused people in the United States generally, and the Bay Area in particular, is growing exponentially. Gentrification, displacement, lack of affordable housing and housing insecurity brought about by health circumstances or unlivable wages for gig economy work leave many in dire need of shelter. But if housing, particularly supportive housing, becomes a social impact market, people needing shelter will be integrated into a massive data collection system. Being out of the elements will not be seen a human right. Rather, the data of unhhoused people will become raw material to expand the impact investment machine. The Welcome Home social impact bond was launched by Santa Clara County in 2015 in consultation with Third Sector Capital Partners. The program, which offers “evidence-based” housing-first services was jump-started with a “disruptive innovation” grant from The Health Trust, whose former CEO Fred Ferrer does outcomes-based consulting and serves on the board of Rocketship Academy Charter Schools, to Step Up Silicon Valley, a program of Catholic Charities of Santa Clara. The deal evaluator for the project is Palantir, a company that offers its software pro bono under a “Philanthropy Engineering,” arrangement. The trade-off? Well, they’re taking “free” services from a company that does a lot of business with the Department Homeland Security and sells predictive policing software.

Interactive map here.

Interactive map of funders here.

Welcome Home SIB

Welcome Home Funders

San Jose Smart City Program

City of LRNG Digital Badging

As I noted previously, Philadelphia and San Jose have a lot in common in that both are Smart Cities and Cities of LRNG, a program of Collective Shift funded through the MacArthur Foundation that promotes early stage learning ecosystems following “the city as your classroom” concept where students demonstrate competencies and earn digital credentials aligned to workforce pathways through digitally-mediated “playlist” experiences. San Jose appears to be advancing more rapidly than Philadelphia with the rollout of 5g and facial recognition cameras. In San Jose, FUSE Corps has deployed numerous individuals within the city government to promote adoption of “innovative,” technology-friendly policies. I don’t have the space here to go into detail, but hope to explore this in a future post. This map includes key elements of the smart city program, work histories of individuals associated with San Jose’s implementation, and FUSE Corps fellows. For additional information on LRNG and badge programs as they relate to out of school time learning and impact investing see posts here, here, here, here, and here.

Interactive map here.

Smart Cities : FUSE Corps

EdNeuro Research Project

The National Science Foundation awarded Dr. Adam Gazzaley of Neuroscape, a research institute based out of UCSF, $750,000 in 2015 to assess how precision video games could be used to map and engineer the executive function of students. In 2016, Melina Uncapher, a research scientist affiliated with Neuroscape and Stanford, introduced a “mobile cognitive health assessment battery,” acronym ACE (Adaptive Cognitive Evaluation), to select classrooms in Santa Clara County schools. I wrote a longer post about Uncapher and learning engineering here. The tool Neuroscape used was developed in partnership with mobile gaming company Zynga, Facebook’s app developer. In addition to running Neuroscape, Gazzaley is co-founder of Jazz Ventures, a venture capital firm that invests in technologies to enhance human performance, and Akili Interactive, a Boston-based company that develops digital therapies. In 2017, Akili successfully completed clinical trials for a pediatric prescription ADHD video game treatment, AKL-TO1. Numerous global pharmaceutical companies have invested in the company, whose website proclaims “It’s time to play your medicine.” Akili also has digital treatments in development for depression and MS.

Interactive map here.

EdNeuro Santa Clara

Partners in Wellness

This is the first pay for success project in the nation with a focus on mental health. Third Sector consulted on it after working on the Welcome Home social impact bond. The goal for the program is to reduce inpatient treatment for 250 Santa Clara County residents diagnosed with severe mental illness. As with Welcome Home, Palantir is providing the software. However the deal evaluator in this case is Dr. Keith Humphreys, professor of psychiatry affiliated with Stanford Medical School. Funding was provided through the Social Innovation Fund and the Nonprofit Finance Fund, the organization Overholser founded.  Paul Brest, professor of social impact at the Stanford Graduate School of Business and co-director of the Stanford Center on Philanthropy and Civil Society, wrote a case study about it in 2016. Brest served as president of the William and Flora Hewlett Foundation between 2000 and 2012 during which time the foundation provided seed funding that helped to launch Third Sector.

Interactive map here.

Partners in Wellness : Santa Clara

After reviewing these maps it should be clear that social impact investors plan to exert control over every aspect of the lives of society’s most vulnerable, including students in our public schools, for private gain. There is a sickening presumption that those with power and financial resources should be entitled to engineer the lives of others. In future posts I plan to lay out the details of how pay for success arrived in Silicon Valley, discuss the Silicon Valley Community Foundation’s role in the PFS landscape, and explore conflicts of interest embedded in the relationship maps above. Stay tuned!

 

When “What Works” Harms Students: Why Stopping Summit Learning Isn’t Enough

Featured image from OpenPTrack, body-based cyberlearning tools, developed as part of an NSF grant “Promoting Learning Through Annotation of Embodiment (PLAE),” Dr. Noel Enyedy, co-principal investigator.

On December 11, 2018 the National Education Policy Center’s e-newsletter confronted the growing backlash against “personalized learning” in general and Mark Zuckerberg’s Summit Learning in particular. Unfortunately, instead of fundamentally opposing the corporate hostile takeover of schools through digital media and learning, they fell back on four data-friendly policy recommendations drawn from Dr. Noel Enyedy’s 2014 brief, which are summarized here:

1) technology investments should not overstep research

2) software developers, researchers, and teachers should partner to determine “what works”

3) dedicate resources to professional development, and

4) be open to new models of technology integration in classrooms

Recent developments around ed-tech and social impact investing make it clear that these recommendations could in fact lead to increased datification of students, especially in light of the passage of Pay for Success legislation embedded in the Every Student Succeeds Act. This post is written as a response to Dr. Enyedy’s recommendations. It also provides additional context around student data privacy concerns and the importance of understanding opposition to online education as a global struggle.

“What Works” Research

Enyedy’s first two recommendations imply technology investments can be made based on research that provides “rigorous evidence of what works and what doesn’t.”  It is significant that his brief predates the Every Student Succeeds Act, which mandates tech interventions based on that same concept. Passage of this legislation the following year opened the door to pay for success (PFS) financial investment schemes. Broad adoption of “personalized learning” is key to scaling the PFS model of privatization, because it normalizes digital instruction, a precondition for cheaply documenting “impacts” associated with outcomes-based contracts.

Narrowly defined “success” metrics are embedded in PFS government contracts to determine how much profit will be paid out to investors. The data collection then dictates how services are delivered and requires intrusive tracking and predictive analytics. Black and brown students enrolled in no excuses charters and “turnaround” schools are disproportionately subject to this type of digital instruction. Student “success” must be captured as quantifiable data to evaluate PFS contracts-hence the rise of digital interfaces and data dashboards.

Teachers cannot possibly enter the amount of data required, especially given large class sizes, which is why they must become “guides on the side.” Screen interactions gather considerably more meta-data, so they have taken precedence over face-to-face instruction. If you’ve wondered why students must take demoralizing pre-tests; the answer lies in PFS. The model only works when there is a baseline from which to assess “impact.” ESSA moved districts away from the big year end test to a regimen of online testing all the time. Efficient, scaleable, automated “solutions” are preferred, which is why PFS and ed-tech are a match made in heaven.

In a PFS world, researchers and deal evaluators play critical roles. They are the ones to set the standards for “what works” and determine if interventions meet expectations. In 2017, three years after Enyedy’s brief, the University of Virginia’s Curry School of Education and Jefferson Accelerator, an ed-tech incubator, partnered with Digital Promise to host an invitation-only academic symposium. The “EdTech Efficacy Research Academic Symposium,” concluded a year-long collaboration of “approximately 150 researchers, teachers, entrepreneurs, professors, administrators, and philanthropists” exploring “edtech efficacy.”

Their work advanced a very specific goal: to “develop, fund, pilot, procure, and implement” edtech according to efficacy research, which meshes perfectly with PFS. Among the initiative’s ten working groups were “Investors and Entrepreneurs” and “Education Philanthropies.” The symposium was underwritten by proponents of social impact investing, online learning and competency-based education including Gates and Zuckerberg. The discussions took place behind closed doors. Teachers were excluded. Parents were excluded. Community stakeholders were excluded. It was not meant to be an open discussion, but rather a tactical session to advance the primacy of tech and impact investing in educational spaces.

Unless we understand how edtech is intertwined with privatizing, speculative financial schemes, many of the policy changes taking place make little sense. Why have tablets replaced blocks and kitchen sets in kindergarten? Not because it is good for children, but rather because students must generate data to prove the “success” of online programs, justifying the redirection of public funds into private hands. The parameters for these investments have been largely established by University of Chicago economist Jim Heckman, who with financial support from the Pritzker family, created an equation and toolkit promising a 7-13% return on investment in Pre-K to 3rd grade interventions. Advances in cloud-based computing, deeply subsidized broadband installation, and a significant drop in the cost of devices have coalesced. Now, after years of planning, schools are rapidly being transformed into data factories, the role of student evolving into that of unpaid digital laborer, raw material offered up for online intervention.

With bipartisan political support, PFS finance is now being applied not only to public education but to workforce development, housing, mental health, addiction treatment, and post-prison reentry. It has been embraced not only in the United States, but also in the United Kingdom, Canada, Australia and international development aid circles. PFS is a tool of neoliberal austerity; one that attempts to mask privatization with data-driven “evidence-based” platitudes. It uses research to advance a “what works” narrative, and that research is often underwritten by the same interests that stand to benefit from the findings.

Equal Partners in the Ecosystem?

Enyedy’s second recommendation presupposes a mutually-beneficial partnership among teachers, software developers, and researchers is possible. But is it prudent to make that assumption? If you look at Global Silicon Valley’s 2012 report, “American Revolution 2.0: How Education Innovation is Going to Revitalize America and Transform the US Economy;” the materials associated with GSV’s partnership with Arizona State University going back to 2010; and the “Theory of Change” put forth by Ridge Lane LP’s education division, it is clear the deck is stacked in favor of privatization and global venture capital. The fact that a tremendous power imbalance exists cannot be overstated. With global edtech revenue topping $17 billion in 2017 and anticipated growth projected to be over $40 billion by 2022, it’s hard to imagine teachers entering into a such a partnership on an equal footing.

What about the robots?

The third recommendation addresses the importance of professional development for educators in implementing ed tech. Which begs the question, why is so little funding being allocated for teacher training in ed-tech now? Could it be because venture capitalists don’t actually see a meaningful role for teachers over the long haul? If you take the forecasts of Knowledgeworks and Global Education Futures Forum at face value, the ultimate goal of technology, telecommunication, and venture capital interests is to replace brick and mortar neighborhood schools with digitally-mediated learning ecosystems. Many elements are being piloted now: standards-aligned competencies, badges, digital vouchers, out of school time learning credit, elimination of seat time requirements, and career pathways linked to alternative credentials. As the Knowledgeworks white paper, “Exploring the Future Education Workforce” notes, with the ecosystem model there will be few career teachers. Those stable, unionized jobs with pensions and benefits will be replaced with “flexible” (ie precarious) employment options like competency trackers, data stewards, and pop up reality producers.

Meanwhile, Fourth Industrial Revolution teaching is being digitally platformed and, where possible, automated. Besides growth in online course offerings in traditional schools as well as virtual ones, we have the VIPKid model in which a globalized teaching workforce competes for apple ratings and gig-economy pay. Growing numbers of US teachers, unable to get by on their meager salaries, wake early to log a few hours tutoring kids in China. In some not too distant future, lean production could leverage instruction delivered by virtual pedagogical agents, much of this research being carried out at USC’s Institute of Creative Technologies with US Army support, or humanoid robots like Bina48 that served as a co-lecturer at West Point this fall.

The Saudi sovereign wealth fund, looking to diversify its holdings, is now making significant investments in AI and robotics. They’ve teamed up with Softbank, known for Pepper the robot. Pepper has a academic edition that delivers curriculum from a screen in its chest for the price of $24,990. In Philadelphia classrooms, Milo the robot provides autistic support services. This is not some distant future; this is happening now. So what does professional development mean in this context? Teachers are on the front lines of the reskilling agenda, expected to model micro-credential and badge acquisition to students. Is it reasonable to expect them to engage willingly in ed-tech professional development if the end game for Zuckerberg and Gates is instruction delivered by Pepper or Jett?

Non-Screen Technologies

Enyedy’s final recommendation suggests other forms of technology implementation be considered beyond traditional adaptive learning systems. For instance, when he published in 2014, an open source “Experience Application Program Interface” (xAPI) was in early development for the Advanced Distributed Learning Initiative (ADL), a project of the US Department of Defense. xAPI advances ADL’s goal of scaling mobile personalized learning systems that incorporate emerging technologies including gamification and simulations. It is meant to go beyond the limitations of laptop-based adaptive learning management systems permitted under SCORM (Shareable Content Object Reference Module), its predecessor. Here, too, Zuckerberg exerts his influence. iFest, an ADL sponsored e-learning symposium held August 26-29, 2018 in Alexandria, VA, featured Bror Saxberg as keynote speaker. Dr. Saxberg, formerly an executive with K12 Inc. and Kaplan, currently serves as the Vice President of Learning Science for the Chan Zuckerberg Initiative. His responsibilities include developing “good learning measurement practice at scale” for pre-K, K-16 and beyond as well as new offline and online learning products.

Using  xAPI, proprietary algorithms can track designated “learning” across platforms including wearable technology, ibeacons, immersive simulations, and phone apps. Thus, in an xAPI world, learning is reduced to a trackable noun, verb, and object statement that can be uploaded to a digital locker or learning record store. This tracking is not just for K12 or P20, but is tied to “lifelong learning” as workers are designated as skilled and re-skilled. Of course there will be an expectation that workers self-finance their own reskilling, likely through for-profit credentialing companies using innovative data-capturing technologies. This will open up vast new markets for educational debt, likely presented as “micro-debt” or income sharing arrangements so as to tap the poorest workers. It should come as no surprise that the Nellie Mae Foundation and the Lumina Foundation, both with origins tracing back to the student loan behemoth Sallie Mae (now operating as Navient), would be leaders in the campaign to deconstruct public education and turn it into a skilling-reskilling, badging, workforce pathway, speculative human capital enterprise.

Researchers are working to connect xAPI with IMS Global, a leader in education data analytics and badging. IMS Global, a non-profit with close to 500 members in 22 different countries, began in 1995 as a program of Educause with the goal of using technology to affordably scale “learning impact.” Educause has received over $87 million in funding from the Gates Foundation. IMS Global facilitates collaboration between educational institutions and edtech suppliers on the development innovative products and digital strategies. When school administrators and teachers, are presented with opportunities to try new technologies like “executive function enhancing” video games or Google cardboard activities, they don’t connect this with xAPI or IMS Global. They don’t realize many of these technologies came out of Defense Department research and are paving the way for cloud-based education that puts data collection before human connection.

While tech initiatives like virtual field trips or work-based learning apps may sound intriguing, it is crucial to recognize that Internet of Things tracking captures not only cognitive performance data, but also social-emotional and biometric data. Dr. Enyedy is surely aware of this, given his position as co-principal investigator on an NSF-funded study “Promoting Learning through Annotation of Embodiment (PLAE)” awarded in 2015 as part of the agency’s Cyberlearning Learning Exploration Project initiative. The study involved gathering and analyzing student motion and location data in “embodied play simulations” for the purposes of assessing improvement in science and math concept understanding. Research on augmented learning environments is advancing quickly. So why are we not yet engaging in robust public discussions on classroom surveillance and student profiling?

Those who see schools as data factories value the prospect of alternative technology deployment. Non-screen applications using wearable technologies actually yield more data points than chromebooks or tablets. That data, particularly soft skills data, is in high demand by employers. Emotion sensing software and even brainwave monitoring devices have been developed for classroom use; for example BrainCo, developed with support from Harvard and now available in Chinese markets. It may sound far-fetched, but the data dust collected in makerspaces or on VR field trips that students take in middle school could one day influence the career pathways available to them.

Framing the Narrative

NEPC’s newsletter noted lack of a clear definition for “personalized learning,” which is intentional. It is difficult to challenge a vague concept that has carefully orchestrated branding. In 2010, the MacArthur Foundation hired Frameworks Institute to create a digital media and learning (DML) toolkit lobbyists and hired “experts” could use to overcome “problematic” ways of thinking about educational technology on the part of the general public. The goal was to enact policy and laws mandating tech-mediated learning environments promoting 21st century skills while breaking down the “classroom bubble” and “the caring teacher model,” which were identified as impediments to education reform. In order to gain clarity about what is happening with ed-tech, we must break free from the framing that industry, in partnership with venture philanthropy, has put in place. We must reject their narrative and develop a language that can speak to the profound crisis we face not just here in the US, but around the world.

Global Connections

The protest that took place against Summit Learning at the Secondary School of Journalism in Brooklyn and featured in the NEPC email needs to be understood within the context of ongoing campaigns of resistance already underway. The Global South has been fighting colonial ICT Education exports for a number of years. Chan Zuckerberg is heavily invested not only in Summit Learning but also in Bridge International Academies, a private education company serving 500 schools in Africa and India. Heated opposition to the company’s scripted online curriculum and substandard facilities began in 2016 in Kenya and Uganda. In the spring of 2018, 174 signatories from 50 countries issued a formal letter of concern over the company’s policies calling for divestment. Africa has been fighting back hard; we should look to their example.

Data Profiling for “Risk” and “Impact”

Artificial Intelligence (AI), machine learning, and data science are being woven into instruction and school operations to predictively profile and even “threat score” students. Tech’s currency is data. Market logic dictates data-mining must increase, because that is where the profit lies. Case in point: Clever’s single sign-in feature aggregates data across 300+ online learning programs. Are parents and teachers supposed to feel good if research, which is often funded by venture philanthropy, endorses a fraction of these programs as “evidence-based?” Should we tolerate 5-year olds wearing oversize headsets that slip down over their eyes as they use QR coded badges to facilitate the ongoing harvest of their data as depicted in this video from Rocketship Academy charter schools? Should we accept high school students being put on Achieve3000 when they could be reading books of their choice that might open their eyes to new possibilities beyond the institutional framing offered by an adaptive system?

And how can we respond to the creation of “Datazone,” a massive online warehousing initiative that holds 300 metrics on 900,000+ students across 23 school districts in Silicon Valley? Datazone is connected to the Silicon Valley Regional Data Trust, funded by Chan Zuckerberg, that links education data with data about foster care, court involvement, and health and human services. SVRDT is a founding member of the National Interoperability Collaborative, which has ties to the National Fusion Center Association and the National Council on Crime and Delinquency. SVRDT is being promoted as a national model to scale data interoperability.

The most vulnerable are being targeted for massive data exploitation. Few of us have a clear understanding of the vast quantities of data being collected in schools, where it is going, how it is being used now, and how it may be used in the future. This data-driven profiling will not benefit “at risk” children; rather, their lifelong data will be the fuel that runs the impact investing machine, like an inescapable treadmill.

The “what works” narrative being put forward is about “what works” for investors looking to privatize public services and demonstrate “impact.” Ed-tech is, at its core, a system of social control. Billionaires like Zuckerberg, Gates and Hastings hope we won’t notice in time. The online systems and dashboards they fund are designed to isolate and track us, making it harder to mobilize.

What next?

We must recognize that edtech in classrooms can never be neutral. Microsoft, Alphabet (Google), Amazon, Apple, and Facebook are reengineering how we are allowed to access information, how we are expected to relate to one another, how we are forced to interface with digital economic systems, and how we are evaluated for “risk.” Cloud-based computing has been inextricably woven into our lives. It will, admittedly, be difficult to disentangle from it. But Amazon Web Services’ close ties to state surveillance and the existence of Bluffdale make it clear that education for liberation cannot take place in the cloud.

Those who are determined not to submit to algorithmically assigned life pathways for ourselves, for our children, and for our communities, must dedicate ourselves to defending public space, building offline communities where we can develop alternatives grounded in humanity and justice. We cannot swap Summit Learning for some slightly less predatory system. Unsurveilled knowledge sharing will survive only if we fight for it. Our first, most urgent obligation, is to mobilize our popular, legal, and scholarly organizations in defense of the most vulnerable. We  must not only ask questions, we must demand answers when institutions dip into the DML toolkit for talking points. We can make space to think otherwise.

What is the power dynamic at play?

Who is being monitored?

What is the profit motive?

What data are being collected?

What profiles are being built?

What is being automated?

Who stands with opposing data-mining and resisting the dehumanization of education and social services?

Let us unite here while reaching out to those struggling abroad. It is our work that can link Brooklyn’s Summit Learning student protestors to their counterparts in Kenya and Uganda resisting Bridge International. Our voices are in a position to change the course of history, and turn it away from their orchestrated narrative.

Big Picture Learning: Priming Workforce Development for Impact Profit-Taking

This post is the second in a Q&A exchange on social impact bonds and pay for success finance with UK blogger Privatising Schools. The focus of this post is Big Picture Learning. For additional background on Big Picture in Philadelphia check out my previous post here.

Privatising Schools: Question 8

Let’s look at a specific example of a social impact bond in education. Here in the UK, as you know, we’ve had eight years of austerity, which has done great damage to public services, especially those provided by local government. But central government regularly launches new funds, targeting particular areas of social need: youth unemployment, homelessness, mental health, and so on. We’ve had the Innovation Fund, the Social Outcomes Fund and, most recently, the Life Chances Fund.

Now, the purpose of these funds – and the government is very explicit about this – is to underwrite new public-private partnerships which will find ‘innovative’ ways of financing public services. In other words, social impact bonds (see here). The Innovation Fund, which was run by the Department for Work and Pensions, served to ‘incubate’ ten SIBs.

One of the projects supported by the new Life Chances Fund will see a US charter school chain, Big Picture Learning, set up a school in Doncaster, a town in north-east England, in order to ‘test new ways of learning through a social impact bond’ (see here). The target group is students who have been excluded from mainstream schools and who would normally be in what we call ‘alternative provision’. Doncaster Council is working with a company called the Innovation Unit, which was spun out of the Department of Education back in 2006, to set up the SIB.

According to a report given to the leaders of Doncaster council:
By introducing this educational model via a SIB, […] we have the opportunity to test innovation due to the use of an outcomes contract and making funding for the services conditional on achieving results. The Social Investors (still to be identified) will pay the provider at the start, and then receive payments from the Doncaster Metropolitan Borough Council (the commissioner) based on the results achieved by the project via a Special Purpose Vehicle (SPV) or other appropriate mechanism.

Can you unpack this for us?

My Response:

It is interesting that the first education social impact bond in the UK is with Big Picture Learning, because I’ve been following them for several years. Big Picture started in Rhode Island in the mid 1990s and was incubated in the Annenberg Institute at Brown University. Their 990 tax form from 2001 states that among their “program service accomplishments” is to “redesign secondary education programs and use telecommunications to create educational models.” The program caught the eye of the Gates Foundation when their focus was investing in small high schools. Gates helped them scale the model, which includes a network of over sixty schools operating primarily in the United States but with outposts in nine other countries. The Doncaster school in the UK will make it ten.

The Philadelphia School Reform Commission entered into a $23 million contract with Big Picture in 2017. At that time they took over Vaux, which was one of the schools shuttered in 2013. Big Picture runs the school, which remains public not a charter, on a contractual basis. This report, prepared by ImpactEd and commissioned by the impact investment-oriented Barra Foundation, states the nature of that contract gives Big Picture a lot of flexibility in how it operates, much more than other public schools in the city have. Of course that is how the privatizers do it, tie up the neighborhood schools in accountability regulations and allow “innovative” models the freedom to do whatever they want while pitching in extra money.

Big Picture operates the school in partnership with the Philadelphia Housing Authority (PHA). PHA spearheaded a major urban renewal project in Sharswood where Vaux is situated a few years earlier. The initiative was carried out as part of a federal “Choice Neighborhood” grant administered by the Office of Housing and Urban Development (HUD). The project displaced hundreds of residents, many of whom were never properly compensated for their homes. Nearly four hundred buildings have been slated for demolition, which will substantially erase the historic character of a community that was once a center of jazz and civil rights activity in Philadelphia.

It’s important to understand the opening of Big Picture within the context of this larger urban renewal project. To maximize profit for impact investors, residents of low-income neighborhoods like Sharswood must be set up for integrated service delivery tracked through regional data systems. Undertakings like Gates’ Data Quality Campaign, the San Jose Datazone, and Project Unicorn make it clear tech and finance interests are working intently to coalesce data lakes for social impact analysis. I anticipate activities will be coordinated through our federal “Promise Zone” program, which was incorporated into Every Student Succeeds Act in 2015. Blockchain digital identity systems, being piloted with un-housed populations now, should be ready for broader implementation within the next five to ten years. Self-sovereign digital identity will be a boon to social impact investors, since software like Enigma is being developed by MIT to permit analysis on encrypted data.

Impact investing in education will be woven into larger interventions around housing, nutrition, substance use, preventative health, and behavioral health care. The ultimate goal is to be able to track “impact” in one area of a person’s life across all other facets of their lived experience. This is being embedded into the “What Works” government mantra, and while integrated service delivery may not be a bad approach IF the goal is to maximize benefit to recipients of services, it can be highly problematic if the goal is actually to monitor vulnerable people to maximize profit for global finance.

Unfortunately I am seeing a move in the latter direction. Entities like LISC (Local Initiatives Support Corporation created by the Ford Foundation, which just put $1 billion of assets into impact investing) are folding Pay for Success into their initiatives as shown in this report “Aligning for Success.” We recently had the Reinvest Philly Summit here where social impact bonds were advanced as a financial tool in creating economic opportunities, healthy communities, and a “just economy.” The summit emphasized the role of hospitals as anchors in community development, which is somewhat unnerving given Alphabet’s (parent of Google) interests in promoting “Smart City” infrastructure through Sidewalk Labs. A spin-off of Sidewalk Labs is CityBlock, a managed healthcare provider for “complex, urban populations.”

The Big Picture model is promoted as a progressive alternative for non-traditional learners and requires out of school learning internships. Their website states enrolled students are expected to work two days per week, unpaid, as part of their schooling. Looking for a lean business model? That would be it. You push staffing costs onto “mentors;” which allows you to have a smaller facility, maybe rotate students; and partners get free child labor. There are a number of other alternative education programs out there that have followed similar trajectories, including YouthBuild, which serves over-age, under-credited students, has an international reach, and provides training in building trades. Their students build affordable housing, which I suspect will allow financiers to begin layering SIBs into their finance structure, too.

I’ve heard Vaux has had a rocky start. A fellow activist shared that at a Big Picture school in another state some of the promised internships never materialized and students were left languishing in sad computer labs. To think they’re now going to build in new layers of profit by structuring it as a social impact bond… privatizers have incredible hubris. If the branding is good it seems few are willing to question something so ethically compromised as swapping up to 40% of a student’s instructional time with unpaid training. It’s Dickensian, and I continue to be shocked at how eagerly people eat it up.

Big Picture also partnered with SalesForce to develop an app called ImBlaze that identifies internship opportunities for students enrolled in the program. Ted Dintersmith, partner in the North Dakota education system takeover and author of What Schools Could Be, donated funds so the app could be used more broadly. I’m not sure why, if students are expected to spend 40% of their instructional time at a work-based placement, schools would rely on an app rather than say a trained school guidance counselor. I expect the real reason is because the app tracks student competencies demonstrated on the job, including social-emotional skills. This data feeds into LinkedIn so Big Picture can “see how student internships align to their career trajectory over time.” Which begs the question, can students opt out of this data collection? Is enrollment in this public education program conditional on being tracked digitally for an indefinite amount of time?

ImBlaze Dintersmith

Is this app-based competency tracking system tied to Pay for Success finance? Seems likely given that SalesForce’s venture capital wing just teamed up with the Lumina and Robin Hood Foundations on “an impact investing alliance dedicated to investing in for-profit education and workforce development companies whose products, services and technologies not only produce a positive financial return, but also have the potential to alleviate or eliminate poverty.”

Lumina Robin Hood Salesforce

Workforce education was one of the first two Pay for Success initiatives launched the Department of Education under the Every Student Succeeds Act. Two million dollars in seed funding went to Jobs for the Future and Social Finance to provide technical assistance to incorporate Pay for Success into four Career and Technical Education programs in different parts of the country. Impact investors are keen on interventions in young children, the pre-k set, because research indicates that’s where they will be able to most effectively move the numbers on their data dashboards and collect their “success” payment. But there is also interest in what used to be called “disconnected youth,” renamed “opportunity youth” now that we have Pay for Success.

“Opportunity youth” workforce SIBs are linked structurally to recidivism SIBs. The first SIB in the US was for incarcerated youth at Riker’s Island Prison, and our largest SIB has been ROCA, which provides services to youth in the juvenile justice system. Social impact investment logic dictates employed youth are less likely to end up incarcerated, therefore, a portion of the “cost savings” that results from non-incarceration is available to be redirected into “success” payments. Incarceration costs are sizeable and straightforward to calculate. This makes it a very lucrative profit center.

So the question remains, what kinds of “success” metrics will be used to assess workforce training? Those in power are most likely to set the terms of success and establish targets they think they can hit. In the NPX “impact security” pilot at San Quentin prison, the success metric is a straightforward number of prisoner hours worked doing computer coding. “Success” has nothing to do with improving the economic outcomes for those who are incarcerated. That would be too messy and may not yield the desired result for the investors.

Given how the impact security for San Quentin was structured, how might such a structure work for Big Picture Learning? Big Picture could issue debt securities to fund provision of educational services. Investors could purchase those securities with the understanding that their profit was contingent on Big Picture meeting success metrics outlined in the securities agreement. Hewlett Packard has been a regular supporter of Big Picture since 2011, so imagine them as the investor. Success targets might be set for the number of students attaining competencies in a proper workforce mindset, or the number of students attaining a credential (we are hearing a lot about stackable credentials and certification here), or even the number of student hours worked in internships. Once the success target is met the donor pays back Hewlett Packard. But say that donor is actually the William and Flora Hewlett Foundation?

Foundations are required to distribute a minimum of 5% of their assets annually to meet the requirements of the Internal Revenue Service. So, why not transfer those funds over to cover the non-profit security agreement. It ends up being much more profitable to the parties involved than a traditional grant, and keeps capital concentrated in corporate hands. Below is a model I developed imagining an HP investment in an impact security to fund pre-k human capital, though a similar structure could work just as easily for workforce readiness.

Impact Security Data Capture

I have serious concerns that creating profit centers focused on “opportunity youth” can’t help but advance a scenario where predictive analytics profile teens and push many unnecessarily into intervention programs. The drive for program growth could very easily lead to young people being flagged as “opportunity youth” not for their benefit, but rather for the benefit of the investors seeking to profit from managing a larger pool of clients. It also means that there will never be a reason to fix the underlying structures that cause young people to become disconnected from their schooling in the first place. If anyone pursued that course, there would be a smaller population to “fix” and the profit center for impact investment would diminish. Therefore poverty must continue, because there is profit in poverty management.

Pay for Success and the Human Value Chain

After a bit of a break, I am finally getting back to the Trans-Atlantic dialogue I had going between myself and UK blogger Privatising Schools. This post is the first in a Q&A series about social impact bonds and pay for success finance.

Privatising Schools: Question Seven

A key focus of your research is the connection between education technology and finance. This aspect of your work answers a lot of questions for me. I’d struggled to understand why the privatisation movement was being pushed not only by companies with a direct interest in selling ‘education services’ – the edu-businesses, the big outsourcing firms, the tech industry – but also by the financial sector.

Why are hedge fund and private equity firm managers sitting on the boards of US charter school chains, or of academy chains here in England? Why is our so-called ‘academies minister’ a former private equity boss? Why have these people suddenly developed a philanthropic interest in education?

You have shown how financial interests, centred in New York and London but operating on a global scale – via the Global Impact Investing Network, for example – are seeking to ‘financialise’ elements of the old welfare state, using complex new instruments like the social impact bond (or SIB). The aim is to create a new investment market within public services – healthcare, education, social services – which have been hollowed out by years of austerity.

As you know, England is the home of the social impact bond. The very first SIB was launched at HMP Peterborough, a privately-managed prison, in 2010. (As it happens, one of the inventors of the SIB, Toby Eccles, is another former Ark employee.) SIBs were then exported to the US, in the form of the ‘Pay for Success’ model. The first SIB in the US, I think I’m right in saying, was launched by Goldman Sachs in 2012, and was used to finance an anti-recidivism programme similar to the Peterborough scheme.

Three years later, Obama’s Every Student Succeeds Act plugged Pay for Success directly into the US public education system, by tying federal funding directly to this new financial instrument.

Could you say more about this? How do social impact bonds work? Why is technology so integral to this new investment vehicle?

My Response:

The premise of a social impact bond is that investors pay for public service delivery with the understanding that if the interventions they’ve invested in “work,” the government pays them back, plus a pre-determined, built-in profit. “Successful” interventions purportedly save the government money by reducing the need for special education, addiction treatment, incarceration, and chronic health management services. The idea is that people identified as being “at risk” of becoming a “burden” on society are “treated” via interventions that are supposed to reduce their likelihood of accessing services in the future.

Of course this structure can be gamed, as evidenced by the Salt Lake City, Utah pre-kindergarten SIB that supposedly reduced the need for special education services for participating children by 99 percent. Most well funded preschool programs, which the Goldman-Sachs-backed project was not, yield at best a 50 percent reduction. So, either the screening tool used to identify children for the program was flawed, or children who may have needed special education services were denied access. This New York Times article, “Success Metrics Questioned in School Program Funded by Goldman” provides additional background.

Social Impact Bonds, or Pay for Success as it is becoming better known, is simply a new method of privatization. Impose austerity so government departments, including education, cannot function; proclaim the system “broken;” and use the created dysfunction as an excuse to outsource services. Worse, by using manipulated data to direct anticipated public expenditures into financiers’ coffers in the present, it hobbles future government operations.

This “Third Way” approach to financing “the public good” has found bi-partisan support in the United States. Liberal interests are happy that services continue to be provided, and conservatives are pleased government is only paying for “what works,” based on data. This summer Democrats, Republicans, investors, consultants, and non-profit service providers all gathered in the Senate Building to celebrate the passage of the Social Impact Partnership Pay for Results Act (SIPPRA), which is set to inject $100 million in federal funding to this nascent “Pay for Success” market. Other beneficiaries of “outcomes-based” contracting include telecommunications companies, cloud-based computing companies, and law firms with expertise in Blockchain smart contracts.

In 2008, the Rockefeller Foundation provided funding to B-Lab to develop the standardized impact metrics that would undergird the system. This framework, now managed as the IRIS initiative, maintains a catalog of over 2,500 metrics aligned to the UN’s Sustainability Goals. Many have specific associated cost savings that are used to calculate profit margins for investors. Predictive analytics establish baselines for individuals and populations, estimate the likelihood they will be “impacted” in a “positive way” (as shown by data), and assess what savings might be generated from “fixing” them via interventions. All of this entails significant levels of surveillance.

Under this model, service delivery becomes increasingly digitized since large quantities of data are required to prove the “success” of programs. Evaluators aren’t equipped to review qualitative data, but instead rely on dashboards that aggregate data streams. Services are platformed to ease data extraction. This dynamic is driving the growth of the ed-tech, tele-health, and tele-therapy industries. In school settings, data dashboards include online learning and assessment data, biometric and health data, behavioral data, attendance data, and school climate data.

The “what works” approach to government and Big Data go hand in hand. The lives of those needing publicly funded services, including students and the poor, are being turned into metrics to feed the impact data pipeline. In the United States, New York University’s Governance Lab has teamed up with UK-based New Philanthropy Capital to coordinate a network of data-centers to push this transition to so-called “evidence-based” policy making.

The NYU affiliated labs are funded by the same entities pushing social impact investing: MacArthur Foundation, Omidyar Network, Pritzker Children’s Initiative, Social Innovation Fund, and the Stanford Center on Philanthropy and Civil Society. I created a relationship map of the labs here. They include: Actionable Intelligence for Social Policy at the University of Pennsylvania, the Rhode Island Innovative Policy Lab at Brown University, Urban Labs at the University of Chicago, the California Policy Lab of UC Berkeley and UCLA, Washington State Institute for Public Policy, and the Ministry of Justice Data Lab.

Many question whether this approach can be made truly profitable for investors. That may be, in part, why despite there being increased hype around social impact bonds, only about a dozen have been launched in the US so far. I was able to locate what I believe to be an important insight into the true nature of the planned profit taking. On page 7 of Ready Nation’s report “Early Childhood Pay for Success Social Impact Finance: A PKSE Bond Example to Increase School Readiness and Reduce Special Education Costs” Robert Dugger, a hedge fund manager who works closely with the University of Chicago Economist Jim Heckman, notes the goal of a 2010 working group was to “facilitate the creation of ‘invest in kids’ bonds that can underwritten individually or aggregated into asset-based securities, which can be invested in by individuals and institutions worldwide.” The key here is asset-backed securities.

Kauffman ReadyNation SIB 2.jpg

The majority of the financiers’ profit could then be generated not from the modest “success” awards built into the outcomes-based contracts, but rather from trading against the debt associated with the provision of outsourced services. They are building a mechanism for legalized gambling on humanity writ large. They seek to create derivatives markets informed by real-time flows of data from the digitized lives of people using public services, including students. Developments in Internet of Things-enabled tracking of behaviors through fit bits, educational games, and compliance monitoring apps as well as the increasing sophistication of Artificial Intelligence-informed high frequency trading will make this possible.

SocialSuite How It Works

They haven’t quite yet found the means to scale it, but they continue to experiment in earnest. A new “impact security” recently developed by NPX is being piloted around prison labor in San Quentin under the name “The Last Mile” with backing from Omidyar Network now. Several entities, including Alice in the UK and SocialSuite in Australia, are structuring impact data platforms around Blockchain technologies. Governments, including the state of Illinois, are examining ways to put public benefits on Blockchain to track outcomes and impact. Eventually all the pieces will click. The next “Big Short” will likely be not on homes but on the data and predictive analytics that shape our lives and future opportunities.

Toxic Philanthropy Part 2: Hewlett Packard Re-Engineers the Social Sector

Hewlett Packard: The Tech Titan Few Education Activists Talk About

Increasingly people are casting a wary eye in the direction of Silicon Valley, concerned about the power its billionaires wield over public education and society generally. While Gates, Zuckerberg, Hastings and Bezos have grabbed much of the spotlight, there is another tech influencer with a long reach that less well known. In this post I will examine the William and Flora Hewlett Foundation’s grants in the area of “effective philanthropy” as they relate to the creation of an economic and policy infrastructure intended to advance social impact investment interests in the United States.

Established in 1966, the foundation is headquartered in Menlo Park, CA. Funds originated from Hewlett Packard co-founder Bill Hewlett. The foundation is one of the largest philanthropies in the United States, dispersing over $400 million in grants per year. Giving areas include: education, environment, cyber, performing arts, global development, strengthening democracy and effective philanthropy. They also manage special projects and donate to initiatives in the Bay Area. The firm, which went public in 1957, is a symbol of the region. HP has long been a leader in hardware and software sales. In 2015 their printer and personal computing business split off from their enterprise business creating two separate firms, Hewlett Packard (HP) and Hewlett Packard Enterprise (HPE).

Why did they need to re-engineer philanthropy?

Before diving into the particulars, it’s important to understand the economic driver behind these so-called philanthropic gifts. Huge markets are anticipated to open up in data-driven government contracting around both social service delivery and climate change management tied to the UN’s Sustainable Development Goals. But before that can happen, governments need to be convinced, non-profits have to be trained, and the infrastructure to gather and assess “impact” has to be put into place. High-level executives and policy makers have been working on this for over fifteen years through New Profit’s “A Gathering of Leaders” and “America Forward” and Results for America. Both New Profit and Results for America have received HP support.

An emphasis on data-driven philanthropy serves HP’s corporate interests in myriad ways. HP and HPE can sell more devices and software. They can sell enterprise solutions including predictive analytics like the “Voice of the Citizen” social media sentiment monitoring platform. HPE is also making inroads in the Smart City market with its Universal IoT Platform. Venture philanthropy requires IoT and geo-location systems to assess “anywhere” learning and capture impact data.

Last year they teamed up with Yet Analytics out of Baltimore on EIDCC, an “experience graph of human capital analytics” that uses AI to project returns on national investments in educational technologies (white paper here). Yet Analytics relies heavily on xAPI, developed by Problem Solutions under contract to the US Defense Department’s Advanced Distributed Learning initiative, to track “learning” that happens “anywhere” via mobile devices. Another division of HPE is Enterprise Blockchain Solutions, a crucial element needed to bring global impact investing to scale.

The map below shows the ways in which HP is connected to human capital management, online education delivery, and digital economic systems. Interactive version here.

HP Associations

Philanthropy Shopping Spree

Remaking the nonprofit sector to serve the needs of global finance capital is a complex undertaking, exactly the type of project for which the foundation of an influential technology company is particularly well suited. The William and Flora Hewlett Foundation distributed targeted grants of varying sizes to policy organizations, special interest groups, higher education institutions, think tanks, venture capital firms, and PR outlets. Often these grants were for general operating support which is notoriously hard to secure. Many grantees work within the United States, but a number have an international reach. In the following sections I will present a series of relationship maps that highlight how HP deployed their capital to create a supportive infrastructure for social impact investing. Below is the overall map of the foundations “effective philanthropy” grant recipients.

Interactive Map of ReEngineering Philanthropy here.

HP Reengineering Philanthropy

Below are HP’s grant recipients that work primarily outside of the United States. Interactive  map here.

HP Global

 

OER, Deeper Learning and Ed Reform 2.0

Paul Brest, see relationship map below, served as president from 2000 to 2012. Under his leadership the foundation made major investments in the development of Open Education Resources (OER) with over 300 grants awarded. OER is openly licensed material, primarily digital, a key element needed to scale online education delivered by curated playlists or algorithms, see the US Department of Education’s #GoOpen initiative. Grants were made in support of the Council of Chief State School Officers’ efforts to advance OER platforms like Gooru and UnboundEd.

Paul Brest HP

Interactive map of Paul Brest here.

Brest also pushed “deeper learning” initiatives,” which align with mastery-based education and emphasize growth mindset, promoted by Stanford’s Carol Dweck. The foundation awarded two “deeper learning” grants totaling over $5 million to the Learning Policy Institute (LPI) based in Palo Alto and led by Linda Darling-Hammond, professor emeritus of education at Stanford University. LPI was created in 2015 as an education think tank to promote “evidence-based” research. Darling-Hammond works closely with Patrick Shields, a researcher with 20 years at SRI International. Beyond HP, LPI’s other funders include heavy-hitters in social impact investing, ed-tech, social-emotional learning, and competency-based education.

Learning Policy Institute Funders

Interactive map of Learning Policy Institute here.

Brest spent much of his career as a professor and dean of the Stanford Law School. After joining HP he became an advisor to several behavioral science organizations including Ideas42. He currently lectures on social impact investing at the Stanford Graduate Business School where he is faculty co-director for the Center on Philanthropy and Civil Society. Brest also writes for the Stanford Social Innovation Review. In this 7-minute video from 2015 he discusses investments in Social Impact Bonds.

Venture Philanthropists

In a world of rising poverty, venture capitalists hope social impact investing and data-driven non-profit and public service management will keep their concentrated capital in motion. Hewlett Packard joined Blue Meridian Partners with a $10 million investment in 2016. The fund aims to aggregate a billion dollars to scale “high-performance” non-profit interventions in child welfare services. The fund is managed under the umbrella of the Edna McConnell Clark Foundation (Avon money), and the chair of the initiative is Stanley Druckenmiller who spent a dozen years overseeing Soros Fund Management LLC before moving on to start Duquesne Capital whose primary investments are in oil and energy. Druckenmiller is a close friend of Paul Tudor Jones (Robin Hood Foundation), and he has long served on the board of the Harlem Children’s Zone.

Blue Meridian

Interactive map of Blue Meridian Partners here.

The William and Flora Hewlett Foundation is a minor partner in this fund. Those making $50 million contributions include: The Ballmer Group (Steve Ballmer, Microsoft and Strive Together); Stanley Druckenmiller (Duquesne Capital, Harlem Children’s Zone); The Duke Endowment; George Kaiser Family Foundation (Bank of Oklahoma and Excelerate Energy); and The Samberg Family Foundation (Pequot Capital, Hawkes Financial Services, and Tri Alpha Energy Fusion Research). The David and Lucille Packard Foundation (ed-reform and early learning); the JPG Foundation (successor to the Picower Foundation); and Charles and Lynn Schusterman Family Foundation (oil and gas exploration, education reform and social-emotional learning) each contributed $10 million to the effort. A number of these foundations joined an earlier program in capital aggregation called the True North Fund through which the Edna McConnell Clark Foundation (EMCF) matched $30 million from the Social Innovation Fund, issuing awards to nine youth-serving grantees that agreed to impact evaluation and evidence-based program development.

EMCF was part of a very early impact investing convening co-sponsored in 2003 by the Goldman Sachs Foundation and the Rockefeller Foundation. That spring fifty individuals representing 31 foundations, financial institutions and funding intermediaries were invited to Goldman Sachs’s headquarters in New York to discuss social returns on investment in education / youth development and community development / employment. The aim was to collaborate in identifying common metrics that could be used to establish a cohesive market for social impact investing. EMDF, New Profit, the Roberts Enterprise Development Fund and Coastal Enterprises presented case studies at that event.

Two years later, America Forward’s “A Gathering of Leaders” would continue this discussion at Mohonk Mountain House in the Hudson River Valley. That meeting was intended to develop a “collective understanding of the barriers to growth and generate ideas for how we could release the potential of social entrepreneurs writ large to dramatically grow their impact.” A pivotal moment came when David Gergen, Harvard professor and former advisor to presidents Nixon, Reagan, and Clinton, admonished the group on the need to work within the existing governmental structure to “mobilize and support social entrepreneurs to directly engage in public policy advocacy.”  It should be noted that Christopher Gergen, his son, is a social impact investor in Durham, NC. Christopher is an adjunct professor associated with the Duke Fuqua School of Business’s Center for the Advancement of Social Entrepreneurship (CASE), writes columns on social innovation for regional newspapers, and founded an online tutoring business that was later acquired by Pearson.

The Mohonk gathering outside New Paltz, NY became an annual event. In 2007 George Overholser, formerly managing team member for Capital One credit cards and founder of the Non Profit Finance Fund, pitched the creation of a $1 billion social investment fund. A refrain from his speech was the important role new technologies will play in monitoring “quality” and expenses in real time. This data will permit “proven” programs to scale via private impact investments. With Blue Meridian, eleven years later, the philanthro-capitalists are pretty close to achieving this vision.

Third Sector NonProfit Finance Fund New Profit

Interactive version of map above here.

Several members of Blue Meridian Partners, including HP, are also members of the Fund for Shared Insight. That entity launched in 2014 to share information and create tools for assessing effective philanthropy, including surveys and feedback loops grounded in business management practice. Other core funders of the “shared insight” effort include the Gates, Ford, and Rockefeller Foundations.

In addition to Blue Meridian Partners a number of other impact investors have received foundation support. Interactive map of additional impact investors here

. HP Impact Investing

Think Tanks and Consultants

HP Think Tanks

Interactive map of think tank grants here.

Non-Profit Finance Fund: Between 2012 and 2014 the William and Flora Hewlett Foundation made three separate $100,000 donations to the NonProfit Finance Fund to develop “tools and research on Social Impact Bonds.” George Overholser, a founding team member of Capital One, created the organization in 2007 and went on to launch Third Sector Capital Partners in 2011. Antony Bugg-Levine, formerly managing director of the Rockefeller Foundation and a co-founder and board member of the Global Impact Investment Network (GIIN) replaced Overholser as CEO.

HP Grants Non Profit Finance Fund SIBS

Bridgespan: HP also awarded over $4.3 million to Bridgespan for general operating funds between 2002 and 2012. Bridgespan was spun out of Bain Capital in the late 1990s. Thomas Tierney, a Harvard MBA and former Bain Executive, created the organization to do consulting work specifically with the non-profit sector. Shortly thereafter, in 2003, Tierney joined the board of eBay where he worked closely as board chair with Pierre Omidyar. Omidyar advances social impact investing on a global scale through the Omidyar Network. Gates has poured over $30 million into the Bridgespan since 2000 to carry out ed-reform, turnaround, and global philanthropy projects. Bridgespan’s other co-founders include Jeff Bradach, a Harvard Business School professor specializing in organizational behavior who began his career at Bain, and Kansan Paul Carttar, another Bain alum who transitioned to a career as an independent consultant for the social entrepreneurship sector. Carttar is now busy launching a venture philanthropy fund in Africa.

Bridgespan

Interactive map of Bridgespan here.

Gates Bridgespan

Above is the list of Gates Foundation Grants to Bridgespan. Direct link here.

Urban Institute: Another think tank that receives ongoing support from the foundation is the Urban Institute, which created a Center on Non Profits and Philanthropy in the late 1990s. A grant was given in 2003, the same year as the Goldman Sachs / Rockefeller Foundation philanthropy meet-up in New York, to underwrite the creation of a “framework to measure non-profit performance.” Three grants totaling $240,000 were awarded between 2012 and 2013 to develop PerformWell, a software platform for social service performance management including setting outcomes, benchmarking and data analysis, all of which feed into impact investing. Urban Institute’s philanthropy center has received $20,000 for general operating support annually since 2010. It is notable that with HP funding they also conducted an assessment of the nonprofit landscape in California in 2008 and later served as a technical advisor on the “Strong Start” pre-k Pay for Success initiative in Santa Clara County, CA.

PerformWell Urban Institute

Interative map of PeformWell here.

America Achieves: America Achieves is an “economic opportunity” think tank that works across education, government and economic sectors to developed “agile” (insert precarious and unstable) systems to “match the magnitude and pace of shifts in the economy” (cue robots and virtual agents). The William and Flora Hewlett Foundation has thus far directed over $1.5 million into Results for America, a program incubated at America Achieves that advances “evidence-based” policy making. Those funds were used between 2013 and 2015 to lobby the federal government to tie budget allocations to proof of impact. During that period Results for America launched their “Moneyball for Government” initiative.

HP also provided America Achieves funding to create a commission on student outcomes, to implement a national campaign around education needs, to study Common Core State Standards, and to implement personalized learning. They received general operating grants in the amount of $650,000 in 2013, 2015, and 2017. These funds were intended to support the promotion of “deeper learning” and the development of a global network of schools that would use the OECD Test for Schools for benchmarking and improvement purposes (again, think impact investing and their EIDCC program to assess ROI on ed-tech investments globally).

Other grants activity to think tanks include: $650,000 awarded between 2009 and 2011 to Root Cause, a Boston-based consultancy that scales “high-performance” nonprofits and has worked with Open Society Foundations; $2.6 million in general operating support to Harvard-affiliated FSG consulting, plus additional special project funds for work in foundation evaluation practices and global network facilitation; and a single $100,000 grant to the Rensselaerville Institute to help practitioners with “outcomes thinking.”

Higher Education

Getting prestigious institutions of higher education on board with this program was also a priority. The tide of social entrepreneurship lifted many boats, and numerous academic institutions have been set up with new programs to advance research and policy development in the impact investing space. The William and Flora Hewlett Foundation issued modest grants in the $100,000 range to the Beeck Center at Georgetown, the Center for Civil Society Studies at Johns Hopkins, and the Center for High Impact Philanthropy at the University of Pennsylvania. Larger grants of around half a million dollars were given to Duke (close ties to David Gergen) and the Hauser Center for Civil Society at Harvard.

Much more substantial awards were made to the Stanford Center on Philanthropy and Civil Society, which is located in HP’s backyard. The foundation supported the operations of the center to the tune of over $6 million since 2006 with awards increasing in recent years and additional gifts made in 2016 to create a new website, purchase a CRM system and develop a communications plan. The center have become a research hub for social impact investing. It publishes the Stanford Social Innovation Review and awards digital impact grants that foster a metrics-oriented approach to service delivery via its Digital Civil Society Lab. Laura Arrillaga-Andreessen, daughter of prominent Silicon Valley commercial real estate developer John Arrillaga and wife of Netscape co-founder Marc Andreessen, founded the center in 2006 and built up the social impact program within the Stanford Graduate School of Business. She also created the Silicon Valley Social Venture Fund, which was incubated within the Silicon Valley Community Foundation for ten years before spinning out in 2008.

HP Universities

Interactive map of higher education grants here.

Influencers

HP also targeted national network groups, the organizations best positioned to establish industry norms for the social sector and train its leaders as change agents. In 2015 the foundation awarded a $10 million grant to the National Philanthropic Foundation for a “New Partnership for Children and Youth,” however no details were given on the website. They directed over $6.7 million in general operating support to the Center for Effective Philanthropy, plus an additional $1.5 million for a youth survey project targeted at Bay Area students, and smaller grants for strategic planning, professional development and national conferences. $1.7 million in general operating funds went to the Foundation Center, which also received grants for their Foundation Center Online, videoconferencing, GrantCraft curated online giving re sources, and a donor management system. Additional grantees included: The National Council on Nonprofits, Peak Grantmaking, Grantmakers for Effective Organizations, Council on Foundations, Institute of Social and Ethical Accountability, National Committee on Responsive Philanthropy, and the Independent Sector.

Interactive map of influencers here.

HP Influencers

Evaluation Platforms

Charitable giving is slated to become a largely decentralized online marketplace where elite social investors will be able to vet a range of proposals before adding to their philanthropic portfolios. The Alice software platform, underwritten by Nominet Trust in the UK, provides a glimpse into where things may be headed. A bleak op-ed from the National Review this June envisions Blockchain smart contracts emerging as a means by which crowd-sourced peer-to-peer charity replaces the public welfare system entirely.

Moving forward, a charity’s or social service provider’s potential for “impact” will be determined via data-driven metrics that are benchmarked against peer institutions. Software and evaluation frameworks that underlie this structure are vital to the system’s operation. Data must be collected, organized, and made available as part of the impact assessment process. Just as online school ratings systems have been normalized by Greatschools.org, there is a charity rating enterprise GreatNonProfits.org, which has received over $600,000 in general operating support from the Flora and William Hewlett Foundation since 2009.

For the time being, humans are the ones reviewing the data dashboards. However some anticipate a day when algorithms and even AI will replace people in making impact investment decisions, as already is the case for much high-frequency trading. See this 2015 whitepaper from the Charities Aid Foundation in the UK “Giving Unchained: Philanthropy and the Blockchain.”

The map below depicts evaluation systems into which HP has invested. These include: Guidestar, Give Well, and Wise Giving Alliance. Idealware and Network for Good are grant recipients that provide guidance to non-profits on software purchases, while Boardsource offers training and development for non-profit leaders. The last grantee on this map, Mobile Giving Foundation indicates the degree to which app-based philanthropy and digital payment systems are supplanting traditional ways of giving.

Interactive Map of Evaluation Platforms here.

HP Evaluation

Special Interest Groups

HP also directed grants to umbrella organizations that serve foundations with a specific social or cultural affiliation or geographic focus. Most received small, recurring general operating grants in the amount of $15,000 to $20,000. The entities representing regional foundations received larger distributions. The Kansas City Community Foundation received the most with over $3 million awarded between 2003 and 2010 for the development of DonorEdge, a non-profit database compiling regional financial, operational and programmatic information. In 2008 Guidestar took over the operation of DonorEdge, which is used by more than a dozen community foundations across the country.

Interactive Interest Group Map here.

HP Interest Groups

Public Relations

All successful campaigns require a communications plan to sell it to the public. This final map features private firms and non-profit media outlets that the William and Flora Hewlett Foundation funded through their “effective philanthropy” program. I have already written extensively about Solutions Journalism Network within the context of vertically integrated “impact media” here. HP has given this media outlet $1.72 million since 2014. The largest gift by far was a $1 million donation made in 2017. Most of the funds were for general operating, though a grant was made for website design and another for development of a “social listening tool.”

HP maintains an ongoing investment in the UK social impact publication Alliance Magazine, awarding $10,000 annually to support free access to its content. In 2002 and 2003 they funded Philanthropix, a photography provider that aids nonprofits in communicating their stories ($450,000). HP also retained Communications Leadership Institute to conduct outreach to policymakers and develop a program to train grant recipients, specifically community college leaders in California, in communications. Lastly, a 2008 grant in the amount of $172,000 was used to hire, in partnership with the David and Lucille Packard Foundation and the James Irvine foundation, the TCC Group to run sessions intended shift the organizational behavior of twenty-seven community organizing groups in California, reported on here.

Interactive Grants Messaging Map here.

HP Philanthropy Messaging

After reviewing all of these grant maps, I hope the massive scale of this systems engineering project is clear. The William and Flora Hewlett Foundation injected tens of millions of dollars over the past fifteen years in an effort to transform the philanthropic community of the United States into a conducive environment for data-driven, outcomes-oriented, evidence based grant-making. HP pursued its goals systematically and strategically. The one question still outstanding is whether or not non-profits will be able to sufficiently scale to accommodate the massive influx of Pay for Success capital that is expected. Next up in the Toxic Philanthropy Series will be an examination of the Silicon Valley Community Foundation (SVCF), the largest community foundation in the country with assets of over $13 billion. The William and Flora Hewlett Foundation made a sizable contribution in 2006 that made it possible for SVCF to be created from the merger of The Peninsula Community Foundation and The Community Foundation Silicon Valley.

 

Toxic Philanthropy Part 1: Surveillance

We are living through desperate times: populations dislocated by climate catastrophe and dispossessed by state violence. Many are attempting, unsuccessfully, to navigate economic systems grounded in low-wage, disposable labor and insurmountable debt. The cost of living continues to rise, especially in cities where wealth is concentrated in the hands of speculative investors.

Stable housing is hard to find; food insecurity is real. Addiction is rampant with limited treatment options, and affordable healthcare is beyond reach. Meanwhile, education is being privatized as children are plugged into devices and told to cultivate a “growth mindset.” Digital tracking of mental health and social-emotional competencies is being normalized. It’s as if the Davos / Fourth Industrial Revolution crowd knows things are about to get much, much worse, and is rapidly locking systems into place to track and manage citizens before they become ungovernable.

As the buying power of the working class withers, capital must find new ways to circulate. Increasingly it will flow into investment markets created by outcomes-based service contracting. Such a model will fuel growth in P3 public-private partnerships and enrich those consulting firms, like Ridge Lane LP, angling to broker agreements. Seed funding to jumpstart this transition was part of the Federal Budget in February, the Social Impact Partnerships Pay for Success Act.

Against such a backdrop, we must critically examine the toxic network of arrangements that have been made between non-profit health and human service organizations (including public education systems), predatory venture philanthropy, and companies that have developed technologies to turn citizens into “impact” commodities that can be tokenized and traded like toxic bundled mortgages in derivatives markets.

Salesforce IXO Impact Securitization

Branding poverty-mining as “what works” government makes it easier for finance and technology interests to convince elected officials that wringing profit from the misery of society’s most vulnerable is something that could actually be made palatable enough to sell to the unsuspecting masses. Whether living in abandoned warehouses or tents in Kensington, in rural Indian villages, or refugee encampments, those needing access to services will have their lives increasingly subject to digital surveillance. Big Data, predictive analytics, and “smart” Internet of Things sensors rooted in Silicon Valley’s technologic systems of control feed social service data dashboards. The “evidence” often emanating from oligarch Jeff Bezos’s omnipresent Amazon Web Services (AWS).

We must be mindful of ties between AWS and the state surveillance apparatus. Last year AWS finished a new “secret region” to hold data for the US Intelligence Community, part of a $600 million contract signed in 2013. They also host data for Palantir, Peter Thiel’s engine for ICE deportations and the predictive policing of Black and Brown communities. Recent deployment of AWS Rekognition software caused waves of protest among the company’s own employees. Amazon stood firm asserting its support of police and military use of its facial recognition technology.

Click here for interactive version of the map below.

AWS Pre-K Surveillance

This spring AWS partner, San Francisco-based Salesforce, awarded Australian firm, SocialSuite, capital funds to refine outcomes measurement software they’d developed in conjunction with the IXO Foundation. IXO and TrustLab piloted Blockchain impact investing tokenized pre-k services in Cape Town South Africa last year. Remember Bezos’s pledge to create new pre-k opportunities through his new $2 billion Day One Fund? Seems like this would be a match made in crypto-heaven.

Salesforce also recently teamed up with the Lumina Education Foundation and the Robinhood Foundation on a $15 million venture philanthropy program to underwrite for-profit education and workforce training, which is an impact investment sector. The Robinhood Foundation, established by New York billionaire Paul Tudor Jones, was among the first to require detailed benchmarking of all its grantees.

SocialSuite 2

This year’s federal budget included generous tax breaks for businesses, including charter schools and for-profit education, that are started in designated “Investing in Opportunity Zones” in low income communities across the nation. It seems likely the Salesforce/Lumina/Robinhood alliance will be taking advantage of this windfall.

Robinhood Foundation Impact

So we have:

1) adoption of dashboards to evaluate education and social services;

2) software intended to analyze and measure “impact” for investment evaluation;

3) digital identity systems for those receiving services;

4) much of this data being managed by one of the most powerful companies in the world, one that maintains close ties with policing and intelligence interests; and

5) tax policies that fuel dehumanization while enriching elite investors.

It is time to take an unflinching look at the grave harm an industrialized “social sector” will inflict in this new age of automated decision-making and sophisticated social and financial risk scoring. Ronald Cohen and his ilk have designs to consolidate the sector and scale “innovative” solutions to benefit fin-tech while throwing humanity literally to the curb. We must recognize the seriousness of this threat and actively seek out and grow systems of mutual aid grounded in responsive cultural practice and community. We need to support grassroots solutions centered on the personal agency and leadership of oppressed and impoverished people. We must also envision alternative ways to accomplish this mammoth task outside the constraints of online crowd funding platforms, a foundational element of digital economic technocracy.

In my next post I plan to outline how the infrastructure surrounding the US social sector has been systematically transformed to serve the demands of social entrepreneurs, largely through extensive grants made in the area of “effective philanthropy” by the William and Flora Hewlett Foundation since the early 2000s. Hewlett Packard and Hewlett Packard Enterprises, based in Silicon Valley, have a clear financial interests in turning our lives into extracted data given that their bottom lines rely on selling not only devices but also enterprise solutions and a growing array of IoT and Blockchain services.

If you want a sneak peak, check out the philanthropy grant map here.

HP Reengineering Philanthropy